We need to protect small landlords as well as tenants from prospect of homelessness
AS the moratorium on evictions ended in England on May 31, 2021, we face the prospect of a million extra families facing the spectre of homelessness.
It is easy to say it is the fault of greedy private landlords, but the problem is more complicated than it appears.
Many of these landlords rely on the rent received to pay the buy-tolet mortgages they have on the property in question.
I have been saying for years that we need more genuinely affordable homes built, and made available on lifetime tenancies.
But that shouldn’t be confused with the current situation, where people who were encouraged to release private pensions early, and put the funds into residential investment to provide for their future, now face hardship when their tenants can’t, or in some instances won’t, pay their rent.
The pandemic has caused financial havoc across the world but at least the UK government has stepped in with furlough, and other income support.
Sadly though, it won’t be enough. We need a method of protecting small landlords from ruin while also protecting the millions of people who rent from them from eviction.
Full government support is needed for those who can’t pay their rent, by paying it for them, at least for the next 12 months.
Dumping millions of people onto an already overcrowded housing register simply isn’t tenable.
We must find a way to protect small landlords and tenants from ruin or the prospect of homelessness.
Most small landlords have buyto-let mortgages which need paying whether the landlord collects rent or not. Lenders aren’t always benevolent towards small landlords in these circumstances as the transaction is seen as commercial.
However, this area of commercial lending affects many people through the ricochet scenario it creates. In many instances when
the rent isn’t paid, the mortgage isn’t either, which creates a double whammy.
There are two options which might help alleviate this situation: The government pays the rent straight to the landlord’s lender for up to a year or they legislate that lenders have to give mortgage holidays for the period of any eviction moratorium.
The second option may cause problems in the balance sheets of major lenders but at least they are better able to cope than small landlords and their tenants whose daily lives are stressful enough.
Major banks and building societies borrow money on the international money market to then relend that money to businesses and individuals at higher rates than they are borrowing at. It’s the way the system works but is too complex for me to go into here.
We elect governments to manage our economy in the best interests of as many people as possible. Families and children must come top of this list.
Family, children, and community are the very fabric stable democratic societies are made from. If Britain had a bill of rights, like the USA, surely this should be its first amendment!